- WTI plummetting on coronavirus demand-side concerns.
- A more aggressive OPEC+ response is going to be needed.
Oil prices on Thursday continued to bleed out and futures were in the fifth consecutive session of declines to their lowest finish in more than a year. The coronavirus fear has escalated this week as the spread of the virus hits all corners of the world pumping panic into global financial and commodity markets. At the time of writing, West Texas Intermediate crude is trading -4.84% having dropped from a high of 448.75 to a low of $45.91.
West Texas Intermediate crude for April delivery lost $1.64, or 3.4%, to settle at $47.09 a barrel on the New York Mercantile Exchange as traders continue to pull out of longs in anticipation of lower levels to buy back in when the buying resumes, potentially as the virus threats dissipate and/or OPEC+ intervenes. The price has dropped to a level of prior accumulation and higher volumes and should be expected to slow within these fresh territories.
All eyes on OPEC March meeting
“While there remains a wide range out potential outcomes, the risk to energy markets remains particularly elevated as travel restrictions could see ex-China demand weaken further,” analysts at TD Securities explained, adding:
“This suggests that before energy markets can make a sustainable move higher, a more aggressive OPEC+ response is going to be needed at the March meeting, and thus far Russia is seemingly reluctant to participate in further curtailments — which is raising fears of an OPEC+ break-up. In the near-term, we expect CTAs to continue to add selling pressure in Brent and RBOB gasoline in response to strengthening downside momentum.
WTI levels
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